Mining major Rio Tinto slumps to $A1.2 billion annual loss

MINING giant Rio Tinto has fallen to a $A1.22 billion annual loss and is set to slash its dividends amid plunging commodity prices.

AAPFebruary 11, 20168:25pm

A Rio Tinto employee aboard a shiploader at Karratha Port in WASource:News Limited

RIO Tinto has fallen to a $US866 million ($A1.22 billion) annual loss and warned dividends to shareholders could almost halve in 2016.

The global miner’s loss compares to a profit of $US6.5 billion in 2014, as revenue fell by close to $US13 billion due to plunging commodity prices.

Chief executive Sam Walsh said 2015 had been a tough year.

“2016 is shaping up to be even tougher,” he said.

Rio announced an end to its current progressive dividend policy in favour of a more flexible approach to reflect the company’s performance.

Rio Tinto CEO Sam Walsh warned 2016 was shaping up to be an even tougher year than 2015.Source:News Corp Australia

It will pay dividends of $US2.15 per share for 2015, and said it intends that 2016 full year dividends will fall to no less than $US1.10.

“With the continuing uncertain market outlook, the board believes that maintaining the current progressive dividend policy would constrain the business and act against shareholders’ long term interests,” Mr Walsh said.

Rio will also make a further $US1 billion in cost cuts in 2016, and intends to make another $US1 billion in cuts in 2017.

Capital expenditure will also be reduced by a further $US3 billion than that already planned over the next two years.